High-Tech Hitchhiking

I just read an article on something I have thought about myself: using cellphones and GPS devices to enable "High Tech Hitchhiking." See http://www.theoildrum.com/node/4406

This is a great idea. A really really great idea. In a nutshell the concept is to give people the ability to share their cars with others in a dynamic "spur of the moment" way and give users Ebay like ratings to ensure safety.

But this concept will have serious hurdles to get over if it is ever to come to pass.

Car sharing of this type would be a huge threat to the taxi industry and other entrenched players and those industries cannot be expected to just sit back and let this happen. They will do everything in their power to stop this from happening and do everything conceivable to undermine it should it start. And we should not underestimate their power. I do not think this kind of thing will be allowed unless there is a real sense of crisis (environmental or oil supply). And yes there are plenty of ways to stop this.

BTW, a theme you will be seeing on this blog will be how manipulated our economy is and this is a very good place to start.

Car sharing involving money is illegal in almost all of the United States. Very illegal and vigorously prosecuted.

You cannot get insurance in my state for a car that will be shared on a regular basis with non family members (even if no money is involved). They will not sell it to you at any cost. I asked. It's *state law*. I suspect that most states have this same restriction. This pretty much puts the kibosh on this kind of car sharing given that you cannot drive at all in my state without car insurance!

The taxi industry is technically a cartel in most places.

If you think about it this is a massive manipulation of our economy! In most places there is an absolute fixed number of taxi's allowed and in order to operate one you must buy a "medallion" which may cost tens or hundreds of thousands of dollars. Can you imagine other industries regulated this way? How about the government mandating that there can only be X amount of websites. If you want one you must purchase a "medallion" from someone who already owns a website. How about restaurants. Cleveland will only allow 2349 restaurants and if you want to open one you must purchase one of the 2349 medallions? It's laughable - except that a major U.S. industry (taxis) actually operates this way!

I've heard the arguments in favor of having this kind of cartel (yes technically this *is* a cartel) and they are not compelling to put it mildly. Biggest argument is space: if we were to allow more taxis our already crowded streets would get even more crowded. This is backwards. If there were more taxis (and car sharing in general) there would be FEWER private cars and there would be MORE space and LESS traffic. There are orders of magnitude more private cars than cabs and I have not seen any proposal to force the far larger group of private car owners to purchase a medallion before they can buy a car. If space is the problem that you want to solve you need to limit private cars and *encourage* taxis and car sharing. The space argument is not a reason it is an excuse. The logic behind this argument is shallow and backwards.

Second argument for medallions: safety. "We can't let just anyone drive a cab lest there be safety issues, so we have to limit the number of taxis". Lets go back to restaurants. Restaurants have safety regulations they must follow but we do not limit the number of restaurants in a city. This to is not a reason but is another excuse.

In fact there is no real reason for the taxi cartel (just excuses) and in todays world not only does it serve no purpose (it did at one time as we will see below), it is counterproductive.

So why do we have this cartel with taxis but not with other industries?

The answer is that allowing cars to be shared (a taxi is a form of shared car) would limit the demand for cars and enhance the appeal of inner cities (over suburbs) and this is the *opposite* of what our leaders wanted after WWII - when these policies were enacted or greatly strengthened. Potential growth in the taxi industry had to be seriously hamstrung - and it was via the medallions, and car sharing had to be discouraged - and it was.

Car sharing has been seriously limited, made illegal or discouraged for decades.

Restaurants on the other hand do not allow people to "share kitchens" and thereby threaten the appliance industry. Restaurants do not eliminate the need for refrigerators and stoves in houses. Websites threaten nothing in this manner either and the mid 1990's -when the web appeared- was a very different era than the depression and post WWII eras when transit policy regarding cabs was being set.

The U.S. government very deliberately enacted policies after WWII to encourage private car ownership and discourage/hamper/limit rail and any forms of car sharing (like the taxi). The idea was that subsidizing the car industry and single family homes - especially in the suburbs, would be a good way to stop the country from sliding back into depression - which was greatly feared. So the cartel idea had some merit then.

Think of all the industries that benefited in the 1940's from a high degree of private car ownership and usage: the auto industry itself, steel, rubber electronics, glass and oil. In 1946 taxi medallions fit right into this. The idea was that people should not be taking taxis around inner cities (or god forbid mass transit) they should be driving their cars to and from the suburbs. *That* was the way to generate solid economic growth at that time. Or so it was thought.

But those reasons (whether or not they were even valid then) no longer make sense given limited and expensive oil and global warming. Now we want and need greater sharing in the transport sector.

Problem is the taxi industry relies on this system. They have (literally) bought into it by purchasing very expensive medallions and could be devastated by private car sharing as described in http://www.theoildrum.com/node/4406. They will fight this like mad. They will fight this in court, they will fight this in state capitals (where their $500/hour lobbyists do their best work) they will fight this in Washington. Not loudly, not with press conferences but as silently as they can. They will fight it in a way that makes it look like they have done nothing. Make it look like things "just happened." That people just "don't want to share their cars". That's the way a determined minority with something to lose often fights in America. Make it look like things were just "freely decided." All they have really have to do (in my state) is keep the laws and insurance regulations the same and then insist (when pressed) that the public just "decided" they didn't like to share their cars.

The taxi industry where I live takes this stuff very seriously. "Gypsy" cabs are fought like mad. Certain seemingly minor offenses are felonies. They feel their livelihood is at stake and clearly they would be threatened by High-Tech Hitchhiking and will fight tooth and nail against this.

Don't expect them to lose barring a real crisis.